Former School Superintendent Schrenko Indicted on Fraud Charges

Sally Quillian Yates, Acting United States Attorney for the Northern District of Georgia,
Lester Fernandez, Special Agent in Charge, U.S. Department of Education, Office of the Inspector
General, and Gregory Jones, Special Agent in Charge, Federal Bureau of Investigation announce
that a federal grand jury has returned an indictment today charging LINDA C. SCHRENKO, 54, of
Grove Town, Georgia, MERLE TEMPLE, JR., 56, of Evans, Georgia, and A. STEPHAN BOTES,
47, of Alpharetta, Georgia, with conspiracy, theft, and fraud. According to Yates:

The indictment charges that in the summer of 2002, SCHRENKO, who at the time was the
State School Superintendent of Georgia, and her former Deputy Superintendent, TEMPLE,
conspired with BOTES, the owner of a computer consulting company, to fraudulently obtain over
a half million dollars of federal funds administered by the Georgia Department of Education. The
indictment charges that SCHRENKO personally ordered the Georgia Department of Education to
issues checks in amounts just under $50,000, totaling over $500,000, to various companies owned
and controlled by BOTES purportedly to provide computer licenses and services to tie Atlanta Area
School for the Deaf, the Georgia School for the Deaf, and the Governor's Honors Program.

The indictment further alleges that BOTES directed a subordinate employee to funnel a total
of approximately $250,000 of the funds obtained from the Georgia Department of Education directly
and indirectly to SCHRENKO, TEMPLE and others for the benefit of the SCHRENKO's gubernatorial campaign through a series of cash payments, wire transfers through a foreign bank
account, and other disguised financial transactions. According to Yates, the indictment charges
SCHRENKO personally ordered payments to BOTES' companies at a time when no services had been performed nor when there were even any contracts with BOTES' companies. SCHRENKO directed the Department to issue 11 checks on the same day, July 24, 2002, in amounts just under $50,000, the maximum amount allowed by her signature alone. The monies ostensibly were to go for service to be provided to the Atlanta Area School For the Deaf, Georgia School For the Deaf, and the Governor's Honors Program. The indictment charges that after SCHRENKO's unsuccessful campaign to run for governor, she used $9,300 of the Education funds to pay for her own cosmetic surgery.

SCHRENKO, TEMPLE, and BOTES are charged with conspiracy, honest services wire fraud, and theft of public funds. A date for their initial appearance before a federal magistrate has not yet been set.

In a news conference this afternoon announcing the indictment, Acting United States Attorney Sally Quillian Yates said, "Ms. Schrenko, Mr. Temple and Mr. Botes are charged with stealing funds meant for the education of Georgia's children and using those funds for a political campaign, personal investments, and cosmetic surgery. We will continue to seek to hold accountable those who violate the public's trust."

Lester Fernandez, Special Agent In Charge, United States Department of Education, Office of the Inspector General, noted in his statement the words of Inspector General John P. Higgins, Jr., saying in part, "OIG Special Agents aggressively pursue those who seek to enrich themselves at the expense of our nation's students. We will continue to work with others in law enforcement to safeguard federal education dollars. I am proud of the work of OIG Special Agents and their commitment to protecting the integrity of federal education funds. The Office of Inspector General is committed to ensuring that education dollars reach the intended recipients, and OIG Special Agents will continue to work with others in law enforcement to prevent fraud in education programs."

FBI Special Agent In Charge Greg Jones said, "As citizens of Georgia, we expect our elected officials to be faithful stewards of taxpayer's money and of the public's trust. When that trust is betrayed, citizens can expect that the FBI will work diligently along with the United States Attorney's Office to seek justice and restore public confidence in government. We want to thank our colleagues at the United States Department of Education for their assistance in this investigation."

Members of the public are reminded that the indictment contains only allegations. A defendant is presumed innocent of the charges and it will be the government's burden to prove a defendant's guilt beyond a reasonable doubt at trial.

The case is being investigated by Special Agents of the U.S. Department of Education, Office of the Inspector General, and the FBI.

Assistant United States Attorneys Russell G. Vineyard and Daniel A. Caldwell are prosecuting the case.

For further information please contact Sally Quillian Yates, Acting United States Attorney or F. Gentry Shelnutt, Chief, Criminal Division, through Patrick Crosby, Public Affairs Officer, U.S. Attorney's Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.usdoi.gov/usao/gan